The South African Wind Energy Association (SAWEA) has put its voice of support behind the release of the draft South African Renewable Energy Masterplan (SAREM), led by the Department of Mineral Resources and Energy (DMRE), and the Department of Trade, Industry and Competition (the dtic), released this week.
The product of a rigorous process, including input from SAWEA’s Manufacturing and Local Content Working Groups, stakeholders have been invited to review and provide comments on the draft masterplan document.
“Together with the broader renewable energy industry, we welcome this framework, as it supports our advocacy for sector industrialisation, through increased local manufacturing. As such, we view the key pillars outlined by the document as effective interventions to create a better environment for local manufacturing, which will no doubt result in increased employment opportunities, investment, social inclusion and acceleration of our industry’s participation in a global wind supply chain,” said Niveshen Govender, CEO of SAWEA.
Masterplan to stimulate industrialisation
Designed to stimulate the industrial and inclusive development of renewable energy and battery storage value chains and contribute to the broader development needs of the country, the SAREM clearly lays out a framework in which opportunities linked to the booming market for renewable energy can be accessed, both domestically and globally.
The four key pillars of SAREM focus on Supporting Market Demand; Driving Industrial Development; Fostering Inclusive Development; and Building Local Capabilities.
“Along with setting clear local content targets for future private and public procurement following a consultation process, the SAREM’s focus on driving industrial development, outlines existing public sector programmes and policy support with localisation objectives. Furthermore, the plan outlines interventions to attract investment and aligns to the different national and international policies of the various government department stakeholders as well as international funding and trade institutions,” explained Govender.
As noted by SAWEA, despite initial localisation targets reflected in the 2022 draft, the SAREM has been revised to exclude specific targets at this time, which will be obtained through an inclusive negotiation process, between the social partners.
Fostering localisation and inclusive development
Another of SAREM’s key pillars, namely ‘Fostering Inclusive Development’, refers to the sectors transformation objectives, and relates to both public and private procurement. As such, clear transformation objectives are to be established by developing and implementing a sector specific BBBEE scorecard with specific BBBEE targets to be achieved upon the conclusion of the negotiation process. Local and emerging suppliers will be supported through the development of a transformation fund.
“Whilst the SAREM draft provides a conducive environment for localisation, we’ve noted that responsibility remains with manufacturers to negotiate the investment and associated targets. Communities are to be involved through directing renewable energy and storage activities, linked to Just Transition hotspots, indicating that public procurement rounds could be launched in these areas. In support of this, Industrial Parks or Special Economic Zones, such as the Atlantis green economy hub, may further be established in these areas to support employment and skills development,” added Govender.
In closing, Govender further said, “An industrialisation agenda, which is rooted in robust local manufacturing capabilities, will allow the wind power sector to deliver the necessary new generation power needed for the country to thrive. To this end, the Masterplan provides a clear framework, which is necessary for both local and global investors, seeking an investment destination to manufacture renewable and new generation technology components, as part of the global supply chain. It is also worth reiterating that in relation to the government’s public procurement vehicle, REIPPPP, a stable and consistent pipeline with foreseeable and predictable timelines between procurement rounds, remains necessary to attract significant investments in order to rebuild the manufacturing sector and create a local market based on its competitiveness and value-add.”